Opinion
July 20, 1970
Proceeding under CPLR article 78 (transferred to the Appellate Division in the Third Judicial Department by order of the Supreme Court at Special Term, entered in Albany County) to review a determination of the Department of State revoking petitioner's real estate salesman license pursuant to section 441-c Real Prop. of the Real Property Law. The respondent brought a proceeding against petitioner, a licensed real estate salesman pursuant to section 441-c Real Prop. of the Real Property Law, charging him with engaging in fraudulent practices and demonstrating untrustworthiness. A hearing was held and the examiner found, "that Stephen Juba had demonstrated untrustworthiness and/or incompetence". The petitioner contends that the determination is not supported by subsantial evidence; that the disjunctive form of the determination is defective as a matter of law; and, further, that the notice of hearing contained no charge of incompetence. Specifically, the complaint charged petitioner with acting in concert with one Battles in purchasing 175 acres of land in Lewis County and reselling it to one Salgado and, subsequently, executing a purchase offer statement to sell the same property to one Beatrice Ranzler; and that petitioner and Battles did thereafter sell 164 acres of land located in Oneida County to Mrs. Renzler, without advising her it was not the same property she had contracted to purchase. Section 441-c Real Prop. of the Real Property Law enumerates various grounds, the conviction of any of which could subject a licensee to revocation or suspension of his license. One of the enumerated grounds is demonstrating incompetence. In the instant case, however, the petitioner was not charged with demonstrating incompetence. Understandably, he would not be prepared to meet this charge on a hearing. There is a great difference between charges of fraudulent practices and demonstrating untrustworthiness, and a charge of demonstrating incompetence. The statute itself distinguishes them by separately mentioning each as grounds. We believe it was improper and unjust to charge petitioner with one violation and to ultimately find him guilty of an entirely different one. Consequently, the finding of demonstration of incompetence cannot stand. We conclude also that respondent's determination that petitioner demonstrated untrustworthiness is not supported by substantial evidence. The record reveals that Mrs. Renzler and her husband actually viewed the Oneida property with petitioner before purchasing it; that by mistake she originally thought the property was located in Fonda, the locale of the office she first contacted by mail; that it was Battles who corresponded with the Renzlers and not petitioner; that it was Battles who signed petitioner's name to the purchase contract. Petitioner testified that he did not know the property had already been sold to Salgado, and there is no proof to the contrary. The record also reveals that the Renzlers were satisfied with the property they ultimately purchased. While Mrs. Renzler did not testify, her husband did; he stated an adjustment in purchase price was made when it was learned that the property purchased contained only 164 acres and not 175. He also testified petitioner made no misrepresentations. Determination annulled, with costs. Staley, Jr., Greenblott, Cooke and Sweeney, JJ., concur in memorandum by Sweeney, J. Herlihy, P.J., dissents and votes to confirm in a memorandum.
As noted by Special Term, the notice of hearing charged a violation of article 12-A of the Real Property Law and the complaint annexed thereto specified fully the facts which were the subject of the hearing and determination of the respondent. The failure of the respondent to specifically include a charge of incompetence does not preclude such a determination. The concept of due process is not violated by virtue of the failure of the respondent to specify in advance that it might find incompetency. The case of Matter of Wignall v. Fletcher ( 303 N.Y. 435) involved a deviation from the subject matter of the proceeding and is inapposite. The record supports the determination of incompetency. The determination should be confirmed.